Syndication of the loans backing Tupperware Corp.'s acquisition of the direct selling business of Sara Lee Corp. launched at a bank meeting Wednesday. Bank of America and JPMorgan are leading the five-year, $200 million revolver and seven-year, $775 million term loan. Pricing could not be determined. A Tupperware spokeswoman stressed that until the deal closed and the financing is set, it is premature to discuss pricing. She also said there are still discussions regarding the exact structure of the loans.
In early August, the two companies entered into an agreement with a purchase price set at $557 million. Sara Lee had announced in February it planned to spinoff that area, which sells beauty and personal care products, primarily in Latin America and Asia. The acquisition should increase Tupperware's BeautiControl business by about 35%, according to a statement by the company (CIN, 9/30). "Tupperware is primarily a durable company and we wanted to expand our product offering...[this will help] reduce earnings volatility and the transaction balances our geographic mix. We will not be as reliant in Europe and can expand into Latin America," said the spokeswoman.
Moody's Investors Service rated both loan tranches Ba2. Tupperware currently has $100 million senior unsecured notes due next year, which Moody's has placed on review for downgrade. The notes are currently rated Baa3. The rating agency says the Ba2 bank loan rating is a result of Tupperware's weakening balance sheet due to the mostly debt-financed acquisition and also recognizes ongoing challenges in the business. Mitigating those facts are the improved geographic and product diversification added by the acquisition.